The Impact of Iran's Internet Shutdowns
Iran has been facing some serious internet blackouts lately, thanks to ongoing protests and an overall shaky economy. These disruptions have sparked a lot of conversations about how well cryptocurrency can be accessed by millions. Surprisingly, about seven million Iranians are using digital assets despite these hurdles. Between January and July 2025, they managed around $3.7 billion in crypto flows, which indicates that on-chain activity is alive and kicking, even when the internet is down. The Iranian rial’s depreciation and economic instability have pushed many to look for safety in cryptocurrencies like Bitcoin, which they see as a way to protect their wealth against inflation.
How Are Iranians Navigating These Challenges?
Iranians involved in crypto seem to have adapted quite well to the difficulties brought on by internet blackouts. They are making use of offline transaction tools, mesh networks, and even satellite links to keep their digital assets accessible. One method includes SMS-based transactions that relay signed Bitcoin transactions via text messages to nodes outside the country. This way, even when direct internet access is cut off, transactions can still go through. They also use local offline transfers with tools like Partially Signed Bitcoin Transactions (PSBTs), enabling transactions without instant connectivity, syncing up with the global blockchain later.
The vulnerability of centralized platforms in Iran has become clear. These services rely heavily on local connectivity and are easy targets for authorities. As a result, more and more people are opting for local self-custody, where they keep their own private keys and craft valid transactions offline, preserving their financial independence even under oppressive conditions.
What Can Be Learned About Financial Systems?
The resilience of Iranian crypto users during internet shutdowns teaches us some valuable lessons about financial systems. A major takeaway is how crucial decentralization is—not just in the financial ledger itself but also in communication channels. A system's strength is often determined by its weakest link in terms of decentralization. The situation in Iran shows that financial systems must have multiple, redundant communication and settlement methods to withstand disruptions.
Furthermore, separating the storage of value and settlement from real-time connectivity is essential. Users can still trade locally through IOUs or vouchers, syncing with the global ledger when the internet is back up. This flexibility makes it clear that financial systems can be built to endure long periods of isolation, ensuring individuals retain access to their assets during difficult times.
The Role of Alternative Technologies
Emerging technologies are proving to be crucial for enabling crypto transactions during internet disruptions. Satellite internet, like Elon Musk's Starlink, is being touted for its potential to restore connectivity in areas where traditional networks are failing. Such services allow high-speed, two-way communication, letting users continue to make crypto transactions even without conventional internet access.
Blockchain infrastructure providers, such as Blockstream, are innovating by broadcasting Bitcoin data via satellite, helping users send and receive transactions internationally without relying on traditional internet. Peer-to-peer messaging apps, like Jack Dorsey's Bitchat, utilize Bluetooth mesh networks to pass transaction data directly between devices, enhancing crypto tech's adaptability in offline situations.
Projects such as Darkwire and Machankura are also working on offline transaction capabilities, using long-range radio and mobile telecom networks to move Bitcoin without the internet. Though these methods have limitations, like needing an eventual internet confirmation to finalize transactions on the blockchain, they show how cryptocurrency technology is adapting in crisis.
The Broader Trends in Decentralized Finance
What’s happening in Iran reflects larger trends in decentralized finance (DeFi) and its impact on traditional banks. DeFi offers key advantages, such as better financial inclusion and lower transaction costs, especially in struggling regions. By bypassing the traditional banking gatekeepers, DeFi platforms allow individuals to lend and borrow peer-to-peer, enabling financial transactions without the limits of traditional credit checks.
As countries face economic crises and internet shutdowns, the push for resilient, offline-capable crypto tools is accelerating. This trend shows how decentralization can help ensure financial independence during crises. The stories from Iranian crypto users underline the potential of cryptocurrencies and DeFi solutions as alternatives to traditional banks, especially in regions facing economic hardships.
